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RENISH RAO (ADVOCATE)     03 January 2011

Urgent !!!! Query on Payment of Cess under B ;OCWW Cess Act,

Dear Friends,

Urgent Please...

In accordance with the provisions of Section 3(2) of the Building and Other Construction Workers Welfare Cess Act, 1996….

Whether a Contractor is responsible to make the payment of Cess @ 1% though the construction activity is being carried out by a Contractor under the virtue of contract with a Private Sector Company / Undertaking for a giant Project?

If yes,

Who is responsible (and at what proportion) to make the payment of Cess, in case the contractor has engaged a subcontractor?

For Clearing of Doubts:

If ‘A’ a Giant Project Player, has engaged ‘B’ a construction Contractor for100/- and ‘B’ engages ‘C’ as the subcontractor for construction cost amounting to20/- out of100/- (In this case remaining construction work worth80/- is to be carried out by ‘B’ himself).

Some urgent input/opinion is highly required.

Thanks in anticipation.



Learning

 2 Replies

Sarjooram Sharma (Assistant Labour commissioner)     14 January 2011

Either the principal employer or the contractor or the sub contractor are liable for payment of cess. If the Principal employer pays the cess, he may recover from the contractor or the sub contractor the amount he paid as cess.

Brajesh Jha (Manager)     29 June 2011

Dear Mr. Rao,

 

As per BOCW Act, both the Owner & Contractor are required to obtain registration from Labour Office. Also the Contractor is required to register its building workers with Labour office. The cess @1% is to be deposited by the Contractor but in case the Contractor is not regd., then Owner can deduct the cess amount from the bills of Contractors & deposit the same with the Labour Office.

Similarly ,in case of Sub-contractors, if the Contractor is regd, it will deposit the cess amount but if it is not registered, the same shall be deposited by the owner after deducting the cess amount from the bills.

You may also refer the case of: Builders Association of India and Ors. Vs. Union of India (UOI) and Ors. etc.  (2007)DLT 578.

Please feel free to contact in case of any further querry.


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